There’s no doubt that the economic
crisis has now made its way round the globe. Recent decisions by
large companies to close plants and cut thousands of jobs worldwide
have only confirmed this.
Likewise, you or your company might also be facing the dilemma of
needing to reduce staff numbers in order to survive. But how do you
actually go about telling staff that they are going to be laid
off?
As an employer or manager, your actions – before, during and after
a round of layoffs – can have a lasting impact on the self-esteem
of the affected, the morale of your remaining workforce and the
success of your business. Ensure corporate responsibility with
these dos and don’ts:
Do make sure all avenues have been explored
Considering that the cost of replacing a valuable employee is high
– 30 to 250 percent of an annual salary, according to some
calculations – you shouldn’t underestimate the importance of
holding on to good employees.
So explore all the possibilities for avoiding redundancies, such as
modifying hours or transferring job roles. Solicit feedback from
your employees. Some may opt for voluntary retirement while others
might welcome the opportunity to share jobs or reduce their
hours.
Do have a downsizing strategy
Start by doing a thorough assessment of your business. Identify the
activities that bring your business the best results. Then focus on
cuts to protect this core business. Many companies react by making
across-the-board cuts because they think it is the fairest and
simplest way. But this can hurt the company in the end. Careful
planning and a systematic approach is the way to ensure that
downsizing brings the desired effect – and results in long-term
business gains.
Don’t downplay the seriousness of the situation or make
false promises
No one wants to be the last to find out that their job might be in
danger. Or be told that it isn’t in danger – and then learn
otherwise. Treat your employees with honesty and dignity: disclose
how the business is doing, how the company plans to respond and how
this could affect them. They will respect the truth more, and your
honesty will encourage them to do their part for the success of the
company.
Don’t hide behind e-mail
This is a tough time for everyone and can be particularly painful
for managers and decision makers. You may want to minimise bad
feelings by minimising contact. But don’t hide in your office and
behind e-mails: this may send the message that you are cold or
uncaring.
Instead, be courageous and open, meet with employees face to face,
show your concern and compassion, offer whatever support you can –
whether it’s help transitioning or time to find new jobs. How you,
as a leader, behave in this awkward and stressful time has
important consequences for the morale and confidence of your
employees – both those who leave and those who stay.
Do be prepared for an emotional response
Getting laid off can be traumatic, not only in terms of the loss in
income, but to employees’ self-esteem. In addition, those who stay
may suffer from feelings of guilt, depression and anxiety. Don’t
downplay these emotions. Allow people to express themselves, bring
in a therapist to help deal with the trauma or create a support
group where employees can share their feelings.
It is common that after a round of redundancies productivity and
morale drops. To help regain lost momentum and keep your company
moving in the right direction, it is important that you stay
positive and think strategically. Rather than simply redistributing
the extra work among your remaining employees, look at ways to
restructure job roles and duties so that you make the best use of
your talent. After all, a new challenge can be a very positive
motivator.